On June 18, Representatives Steve Stivers (R-OH) and Peter Welch (D-VT) introduced the Fair Access for Safe and Timely (FAST) Generics Act of 2015, just nine months after the same bill stalled in Congress. According to a press release from Rep. Stivers’ office, the broad goals of the bill are “to increase consumer access to generic drugs, boost market competition and ultimately save consumers money.”
At issue is what the Generic Pharmaceutical Association (GPhA) and many other trade organizations and allied advocates, including two super-sized pharmacy benefit managers (PBMs), Express Scripts and Prime Therapeutics, refer to as the “abuse” of the Risk Evaluation and Mitigation Strategy (REMS), a policy intended to protect patient safety through a variety of mechanisms.
“REMS are required risk management plans that use risk minimization strategies beyond the professional labeling to ensure that the benefits of certain prescription drugs outweigh their risks,” according to the FDA. In many cases, FDA approval of a product is contingent on attaching a REMS requirement to a drug, especially if there are safety concerns that might otherwise make it harder to get the drug approved.
While some commonly used REMS mechanisms are clearly good for patients, such as providing patient safety guides or monitoring liver function tests (LFTs), there is one aspect of the REMS program that has been subverted by brand drug manufacturers in order to thwart competition from generics companies, according to Stivers and Welch.
Controlling distribution through ETASU
According to information from the FDA about the REMS Program, “No two REMS are exactly alike.” When the FDA implemented REMS in 2007 as part of the FDA Amendments Act of 2007, they included a provision known as the ETASU clause (Elements to Assure Safe Use), which effectively allows a drug company to carefully control the distribution of a drug---and in the process deny distribution of a drug sample to a would-be generic competitor.
Proponents of the FAST Generics Act argue that by misusing the ETASU clause, brand companies have found a loophole through which to further their corporate interests at the expense of the public.
Large-scale opportunity costs
According to a report published by Alex Brill, an analyst at Matrix Global Advisors, in July 2014, REMS abuse costs the U.S. healthcare system $5.4 billion per year, including $1.8 billion to the federal government through Medicare coverage.
In his report, “Lost Prescription Drug Savings from Use of REMS Programs to Delay Generic Market Entry,” Brill makes the case that the costs of REMS abuse are growing, because the FDA is requiring REMS more frequently as a way to protect public safety. In fact, Brill estimates that almost 40% of new FDA approvals are subject to REMS.
The second time around
When the FAST Generics Act of 2014 was introduced in the House of Representatives by Stivers and Welch in September 2014, there was hearty endorsement from the GPhA, along with a flurry of press coverage that continued for months. But ultimately, the bill went nowhere after being referred to the Subcommittee on Healthcare Reform.
So what’s different this time?
While the provisions of the bill are exactly the same, the REMS reform issue has gained considerable momentum in the last nine months as awareness and activism around the issue have increased.
On December 4, 2014, the FDA issued Draft Guidance, “How to Obtain a Letter from FDA Stating that Bioequivalence Study Protocols Contain Safety Protections Comparable to Applicable REMS for RLD.”
The mechanism proposed by the FDA as part of the draft guidance suggests that a generics company obtain a letter from the FDA confirming that their proposed bioequivalence studies provide safety protections comparable to REMS. In addition, the FDA also provides injunctive relief in cases where generics companies are unfairly denied access to product samples.
Unfortunately, the FDA’s guidance was not widely heralded as the answer to the problem, because while it provides ways to potentially increase access in the face of unfair roadblocks, it does not explicitly require that a brand company actually provide samples to a generics company.
In contrast, the FAST Generics Act positions the Department of Health and Human Services (DHHS) as the intermediary between the generic and the brand manufacturers. Under the proposed scenario, generics companies would seek authorization from the DHHS and then submit a request to a brand manufacturer, along with the authorization. They would also have injunctive relief and be able to seek damages from three parties if unfairly denied access to product samples.
A powerhouse coalition steps up to the plate
On June 17, a coalition headed up by the GPhA sent a letter of support for the FAST Generics Act to Representatives Stiver and Welch, citing statistics from Brill’s research and making the point that REMS abuse is tantamount to compromising the integrity of the Hatch-Waxman Act.
This group, which includes GPHa, Express Scripts, the Healthcare Supply Chain Association (HSCA), UAW, the National Association of Chain Drug Stores (NACDS), the National Coalition on Health Care (NCHC), the Ohio Public Employees Retirement System OPERS), the Pharmaceutical Care Management Association (PCMA), the Premiere Healthcare Alliance, Prime Therapeutics, the Public Sector Healthcare Roundtable and the UAW Retiree Medical Benefits Trust, includes diverse interests and constituencies, but they have an overriding common interest---to make sure that consumers have greater access to generic medications at affordable prices.
Although the Pharmaceutical Researchers and Manufacturers of America (PhRMA) has not come out against the FAST Generics Act explicitly, a spokesperson was quoted by the WSJ saying, “REMS are a critical regulatory tool for protecting patient safety. While we are still reviewing the legislation, we are concerned it could undermine the FDA-approved programs intended to address very serious risks to patients.”
Stivers and Welch are ready for round two
The goals of the FAST Generics Act haven’t changed. As Stivers said, “Our bill closes federal loopholes to ensure customers have faster access to less costly generic drugs by increasing market competition and eliminating bureaucratic red tape.”
The bill, which was just submitted to the House Energy and Commerce Committee—the same committee championing the 21st Century Cures Act—has undoubtedly picked up steam as awareness around the issue of REMS abuse has grown.
Given the Supreme Court’s decision yesterday to uphold the Affordable Care Act, as well as the focus on defining the relative value of expensive cancer treatments using a scorecard and other steps being taken to control costs, while ensuring access, the current climate favors a better reception for this year’s FAST Generics Act.